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Pay hikes for workers, but lower wage costs for company

SOME workers at Rasel Catering Singapore enjoyed bumper wage increases last year, thanks to a government subsidy scheme.

The company will save about $20,000 to $30,000 each year in wage costs.

This will work out to an estimated total of $70,000 to $80,000 over the three years of the initiative, which was introduced in last year's Budget, Rasel's managing director Alan Tan told The Straits Times.

The scheme subsidises 40 per cent of pay rises for Singaporean workers earning up to $4,000 a month.

Rasel driver Teo Bee Seong, 52, was one of those who benefited, receiving a 20 per cent salary increment.

The extra money will come in handy for his two children's education. His daughter is reading medicine at the National University of Singapore while his son is studying at a polytechnic.

"It has helped me to better provide for my family... It has made my hard work worth it," said the employee of four years.

The Wage Credit Scheme is part of a three-year transition support package to help companies restructure amid a tight labour market. It aims to encourage bosses to share productivity gains with workers.

The first tranche of payouts will be disbursed by the Government at the end of next month. Eligible employers will automatically receive payouts based on their Central Provident Fund contributions for employees' 2012 and 2013 wages made by Jan 14.

Mr Tan said having this initiative meant he could afford to be more generous with pay increases last year. About 10 of his 50 workers have reaped the rewards thus far.

He hopes the scheme will be extended beyond three years, and the wage limit will be raised to about $4,500 or $5,000.